Fidus Investment (FDUS) Analysis | BDC Stock Breakdown

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1:00that provides debt and equity financing to lower middle market businesses across the United States. The company primarily targets businesses with annual revenue between roughly 10 million and $150 million. Its objective is to generate recurring income from its loans while also creating potential capital appreciation through equity investments. That combination makes FITIS slightly different from a BDC that focuses almost entirely on senior secured loans. FDUS can collect interest income from its debt portfolio, but it can also generate meaningful realized gains when one of its equity investments is sold successfully. Let's begin with the latest financial performance. During the first quarter of 2026, FITIS generated total investment income

2:00of approximately $47.5 million, representing an increase of more than 30% compared with the same quarter one year earlier. Net investment income was approximately 65 cents per share while adjusted net investment income came in at 62 cents per share. That was comfortably above the regular quarterly dividend of 43 cents per share. Adjusted earnings therefore covered the regular dividend by approximately 144%. However, investors should understand that the quarter benefited from unusually high fee income. FITIS generated approximately $8.9 million in fee income compared with only $2.1 million during the same quarter in 2025. Management explained that much of the increase came from a one-time fee associated with the refinancing of a portfolio company.

3:01That means the headline earnings number was excellent, but investors should not automatically assume that 62 cents per share will be repeated every quarter. Let's examine the portfolio. At the end of March 2026, the FITIS investment portfolio had a fair value of approximately $1.4 billion. It included 97 active portfolio companies providing FDUS with a reasonable amount of diversification across individual borrowers. Approximately 72.5% of the debt portfolio was invested in variable rate loans. The weighted average yield of the debt investments was an impressive 12.5%. FITIS also reported that the portfolio's fair value was approximately 102.5% of its cost basis, suggesting that the overall portfolio remained modestly appreciated rather than deeply underwater.

4:04Floating rate loans have been highly profitable for BDCs during long periods of elevated interest rates. However, they created potential trade-off declining interest rates could reduce the interest income FITIS receives from its borrowers. Lower rates may improve the financial health of those borrowers, but they could also reduce FDUS's portfolio yield. The dividend is one of the strongest parts of the FITIS investment case. For the second quarter of 2026, the company declared a regular dividend of 43 cents per share and a supplemental dividend of 19 cents, producing a total quarterly distribution of 62 cents per share. FITIS also reported approximately $1.14 per share of spillover income at the end of the first quarter. spillover income represents taxable earnings that have not yet been distributed and can provide management with additional flexibility

5:06to support future dividends. And a share price of approximately $20.30 and 33 cents, the regular dividend alone produces an annualized yield of roughly 8.5%, including supplemental dividends paid over the previous four quarters. The trailing distribution yield is closer to 10.9%. The supplemental payments can change. However, we should not be treated as guaranteed income. Let's examine valuation. Let's go, dude. Let's get it. FITIS reported net asset ink, ugh, caught. I can't speak today, you guys. Appreciate all your patience with me, though. But FITIS reported net asset value of $19.55 per share at the end of March. With a stock trading near $20.33, FDUS trades at a modest premium of approximately 4% to its reported nav.

6:08That valuation... Are your ad campaigns lighting up the dashboard? But not the pipeline. That's bullspend. And marketers are calling it out in dashboard confessions. My boss asks for results, so I open my dashboard for the only positive sounding metric I add. Impressions. Cut the bullspend. See revenue? Not just reach. LinkedIn delivers the highest return on ad spend of major ad networks. Advertise on LinkedIn. Spend $250 on your first campaign and get a $25 cried I go to LinkedIn.com slash campaign. Turn sick edition supply. Hold on. Whoa. Uh, sorry you guys, I'm still off right now. Appreciate all you guys. But yeah. Wow, this is the first time I've just had... I've had just brain, my brain's not working. What I'm trying to say is this. Investors should understand that the quarter benefited

7:09from unusually high fee income. Fight is generated approximately $8.9 million in fee income compared with only $2.1 million during the same quarter in 2025. Management explained that much of the increase came from a one time fee associated with the refinancing of a portfolio company. That means the headline earnings number was excellent. But investors should not automatically assume that 62 cents per share will be repeated every quarter. Now, let's examine the portfolio. At the end of March, 2026, the fight is investment portfolio had a fair value of approximately $1.4 billion. It included 97 active portfolio companies providing FDUS with a reasonable amount of diversification across individual borrowers. Approximately 72.5% of the debt portfolio

8:12was invested in variable rate loans. The weighted average yield on the debt investments was an impressive 12.5%. Fight is also reported that the portfolio's fair value was approximately 102.5% of its cost basis. Suggesting that the overall portfolio remained modestly appreciated rather than deeply underwater. Floating rate loans have been highly profitable for BDCs during periods of elevated interest rates. However, they create a potential trade off. Declining interest rates could reduce the interest income. Fight is received from its borrowers. Lower rates may improve the financial health of these borrowers, but they could also reduce FDUS's portfolio yield. The dividend is one of the strongest parts of the FDUS investment case. For the second quarter of 2026, the company declared a regular dividend of 43 cents per share

9:13and a supplemental dividend of 19 cents, producing a total quarterly distribution of 62 cents per share. Fight is also reported approximately $1.14 per share of spillover income at the end of the first quarter. Spillover income represents taxable earnings that have not yet been distributed and can provide management with additional flexibility to support future dividends. At a share price of approximately $20.33, the regular dividend alone produces an annualized yield of roughly 8.5%. Including supplemental dividends paid over the previous four quarters. The trailing distribution yield is closer to 10.9%. The supplemental payments can change however, ensured not be treated as guaranteed income. So let's examine the valuation. Fight is reported net asset value of $19.55 per share at the end of March with the stock trading near $20.33.

10:19FDUS trades at a modest premium of approximately 4% to its reported nav. That valuation appears reasonable. Considering the company's dividend coverage, spillover income and history of supplemental distributions, it is no longer trading at a meaningful discount though. Investors purchasing FDUS today are paying a small premium for the company's income generation in historical performance. There are several risks to consider here. Fight is lens to smaller private companies that may have fewer financing options and less financial flexibility than large publicly traded corporations. Credit losses can therefore increase quickly during an economic downturn. The company also reported a net realized investment loss of approximately $12.3 million during the first quarter. One quarter of realized losses does not automatically indicate

11:19serious portfolio deterioration, but it is something investors should continue watching. Financing costs are another concern. Fight is reported a weighted average interest rate of approximately 5.2% on its outstanding debt. And its interest in financing expenses increased substantially compared with the previous year. If portfolio yields decline while borrowing costs remain elevated, the company's earnings spread it could become narrower. So what is my final rating for Fightis Investment Corporation? FDUS has strong regular dividend coverage, a large spillover income reserve, an attractive portfolio yield and a history of rewarding shareholders with supplemental dividends. Nav remains stable at $19.55 per share between the end of 2025 and the end of the first quarter of 2026.

12:19Despite continued portfolio growth, the biggest concerns are the exposure to small borrowers. Reliance on variable rate investments, the one time fee income that boosted the latest quarter and the fact that the stock currently trades slightly above nav. Overall, I give Fightis Investment Corporation an 8.5 out of 10. I consider FDUS one of the stronger income-oriented BDCs, particularly for investors who value supplemental distributions and the potential upside from equity investments. At the current valuation, I would view it as a solid long-term income holding, although a price closer to or below nav would provide a more attractive margin of safety. This rating is based on the company's current financial condition in valuation and is not a guarantee of future performance. I do wanna say this, this none of this is financial advice,

13:21not financial advice. Always do your own research, speak with a financial advisor, and just remember, I'm doing this for entertainment and educational purposes only. I do it for the love of the game. So once again, not financial advice. Talk to a financial advisor. Always the best thing, best thing to us best way to go. Anyway, thank you guys for watching the BDC stock breakdown. Let me know in the comments whether you own FDUS and which business development company would you like me to cover next. I appreciate your patience and your time. Have an incredible rest of the day. Fall has never looked or tasted this good. Sweet Greens Fall Harvest Menu is back with seasonal favorites, dressed to impress and made to be devoured. Warm roasted sweet potatoes, crisp apples, maple glazed brussels, and crave worthy flavors in the autumn harvest bowl, maple glazed salmon plate, and roasted bacon brussels side. The season's most desirable menu

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